Your firm and 2 competitors share a niche market producing outdoor heaters. You are considering launching a new model called "Pretty darn hot" in addition to your two existing products, Cozy I and Cozy II. Your competitors currently sell the "Not too warm, not too cold" and "Australian Winter" models. Current sales (which are assumed to continue in the absence of new product launches) and expected sales when the new product enters the market are depicted in the table below (numbers in thousands $): Product Current Period Sales Expected Period Sales "Cozy I" 14.6 14.0 "Cozy II" 23.8 19.9 "Pretty darn hot" 26.2 "Not too warm, not too cold" 96.8 83.6 "Australian Winter" 40.5 37.0 What are the incremental sales that you should consider when evaluating the new model (in $'000)? (Give your answer in thousands accurate to 2 decimal places)

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Your firm and 2 competitors share a niche market producing outdoor heaters. You are considering launching a new model called "Pretty darn hot" in addition to your two existing products, Cozy I and Cozy II.
Your competitors currently sell the "Not too warm, not too cold" and "Australian Winter" models. Current sales (which are assumed to continue in the absence of new product launches) and expected sales when
the new product enters the market are depicted in the table below (numbers in thousands $):
Product
Current Period Sales
Expected Period Sales
"Cozy I"
14.6
14.0
"Cozy II"
23.8
19.9
"Pretty darn hot"
26.2
"Not too warm, not too cold"
96.8
83.6
"Australian Winter"
40.5
37.0
What are the incremental sales that you should consider when evaluating the new model (in $'000)?
(Give your answer in thousands accurate to 2 decimal places)
Transcribed Image Text:Your firm and 2 competitors share a niche market producing outdoor heaters. You are considering launching a new model called "Pretty darn hot" in addition to your two existing products, Cozy I and Cozy II. Your competitors currently sell the "Not too warm, not too cold" and "Australian Winter" models. Current sales (which are assumed to continue in the absence of new product launches) and expected sales when the new product enters the market are depicted in the table below (numbers in thousands $): Product Current Period Sales Expected Period Sales "Cozy I" 14.6 14.0 "Cozy II" 23.8 19.9 "Pretty darn hot" 26.2 "Not too warm, not too cold" 96.8 83.6 "Australian Winter" 40.5 37.0 What are the incremental sales that you should consider when evaluating the new model (in $'000)? (Give your answer in thousands accurate to 2 decimal places)
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